May 4, 2012 / 3:10 AM / 5 years ago

TransCanada to seek new U.S. permit for Keystone pipeline: report

Russ Girling, president and CEO of TransCanada, talks to a shareholder before the company's annual general meeting in Calgary, Alberta April 27, 2012.Todd Korol

WASHINGTON (Reuters) - TransCanada Corp (TRP.TO) will ask the U.S. government as early as Friday for approval to build the $7.6 billion Keystone XL oil pipeline which has been put on hold due to environmental concerns, the Washington Post reported late on Thursday, citing sources familiar with the matter.

According to one of the sources who declined to be identified, one segment of the pipeline - from Cushing, Oklahoma, to Port Arthur, Texas - does not need a permit from the State Department and would not be part of the company's application for approval, the newspaper said.

The company, however, is expected to stick to its plan to build the pipeline through Nebraska, a route that would help it avoid ecologically sensitive areas, the paper said. The project would originate in Alberta, Canada.

President Barack Obama put the massive project on hold this year after influential environmental groups vehemently opposed it, saying the pipeline would cross an important aquifer, which raised the risk pose by any spills.

Environmentalists also argue the crude it would bring from Canada's oil sands is dirtier than other types of crude oil.

The U.S. House of Representatives, however, has voted four times in the past two years to speed up the construction of the pipeline, and the project has become a tool for Republicans to attack Obama's economic and energy policies ahead of November presidential elections.

State Department spokeswoman Beth Gosselin said TransCanada had yet to submit an application for a new permit, but added that Chief Executive Russ Girling met several officials on Wednesday, including the person with primary responsibility for overseeing the department's review of such applications.

"He met with Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs Kerri-Ann Jones and other department officials," Gosselin said.

"When we receive an application, we will conduct a thorough and transparent review to determine whether it is in the national interest."

TransCanada officials could not immediately be reached, but the company has said it would seek a new permit soon.

Even though Obama put the cross-border plan on hold, his administration has supported construction of the pipeline's southern-most leg through Oklahoma and Texas.

The entire project will take more than two years to build once permits are in hand.

Congressional negotiators attempting to craft new transportation legislation will consider a proposal in that bill to accelerate Keystone's development.

Reporting By John Crawley and Arshad Mohammed; Editing by Miral Fahmy

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